How to make the best trading Journal in Forex
Trading Journal plays a crucial role in forex trading, and helps traders in many ways throughout the trade. However, many people don’t understand the importance of creating and using it. In this article, we will discuss the most critical elements, benefits, and popular platforms to create the best trading journal.
What is a trading Journal?
A trading journal is a diary or ledger to record important information about all your trades, including trading sessions, time, financial instruments, opening, closing, stop loss, take profit and other crucial points.
The main aim of a trading journal is to keep track of all the winning and losing trades with profit or loss. These journals will help you to analyze the works and identify the strengths and mistakes.
Trading Journal is essential while trading in financial assets like currencies, cryptocurrencies, gold, stock, comex product, etc. You can make and lose money in the financial market. Therefore, it is essential to maintain a ledger to record all the transactions and manage your risk accordingly.
A quick glance
A trading journal is a diary or ledger to record important information about all your trades, including trading session, time, currency pair, opening, closing, stop loss, take profit and other crucial points.
You can maintain a trading journal in a notebook or simply in the spreadsheet of Excel on your desktop or smartphone. You can even record your trade online using different software and applications.
- Trade Sync
- Identifying your weakness and strength
- Effective Decision Making
- Self Improvement
- Maintaining Consistency
- Historical Record
- Disciplined trading
Best trading journal software
Maintaining a trading journal is not as difficult as you think. However, keeping the habit of recording your trade transaction always and paying attention to even a single trade can be complex.
You can maintain a trading journal in a notebook or simply in the spreadsheet of Excel in your desktop or smartphone. You can even record your trade online using different software and applications.
A trading journal is a way to keep track of all your trades. You can keep the journal in the form of a physical notebook, an electronic spreadsheet, or even an online app.
However, if you don’t want to do so, you can also go for an online platform. There are many platforms that provide paid and free trading journal services. Here are the popular providers with their key features.
The first on our list is TradeVue, with overall good features. It provides access to automated services, data analytics tools, market insights, risk management, etc.
The platform provides the facility to create your best free trading journal. However, with the free plan, you can only record 30 trades per month. For paid services, the charges are from $29 to $49.
Trade Sync is another popular platform for advanced trading journals with premium features. The platform also offers customized services to edit and adjust your trading journal accordingly.
Also, the best part about the platform is it displays information like opening, closing, stop loss, and take profit level on the forex chart. You can also view the details of specific trades using several filters like date, strategy or currency pairs.
As the name suggests, Edgwonk works to improve the edge of traders. You can access different types of journals, customizable filters, charts, graphs and many other things on the platform.
It provides trading journal software on a web platform as well as a mobile app. The platform also offers the facility to optimize and backtest your strategy. The best part about the platform is you can add tags, notes, perceptions and other psychological information.
This trading platform is a suitable option for traders who use trading views as it can automatically import trade data from the trading view. Also, you can record unlimited trades on the software, which other platforms lack.
It supports almost all big brokers, so you can connect the software with your broker and take advantage of its exclusive features. It also offers the facility to test your strategy against historical data.
What should include in the trading journal?
We have discussed the importance of trading journals. However, it is essential to record all the relevant details of your trade. Here is the information included in good trade journal examples or format:
General Trade Information: The best trading journal contains general information regarding all your trades. Think about what you look for when you recall your past trades.
It can be the date, time, currency pair, buy or sell position, entry, exit, support and resistance points. So basically, you have to include all this information that you may require in the future.
Performance Metrics: It refers to the statistical data or numbers related to trade. It may involve winning and failure rate, profit or loss percent per trade, overall return, numbers of trades, leverage, risk-reward, lot size, etc.
Remember, statistical information plays a crucial role as it helps in determining your overall profit or loss. So fill in accurate data; otherwise, the whole result may change.
Market philosophy: Apart from your trade-related data, your trading journal should also include behavior, perception, trends or philosophy of the market.
It may include correlation between financial assets, important fundamental analysis events, exchange rate fluctuation factors, trade management rules etc. So, whenever you need this information, you can get it from the journal.
Missed Opportunities: With the trade you have placed, you should also maintain the list of opportunities you have missed, which result in a good profit.
So whenever you find similar market conditions in the future, you can place a trade. Also includes the mistake you have made while placing a trade like entering the market before, setting the wrong stop loss level or any other mistake that reduced your profit.
Benefits of Forex Trading Journal
Identifying your weakness and strength: One of the best ways to determine your strength and weakness is to keep a trading journal. It will help you to identify the number of winning and losing trades and the reason behind the trade result.
So that you can make changes to deal with your weakness. Suppose you find that whenever you trade in GBP/USD pair, you lose money. It indicates that there is something wrong with your trade planning or implementation.
Effective Decision Making: The best trading journal contains the entry, exit, time frame, trading strategy, profit, loss and other important details of your trade.
Keeping and analyzing these details will help you in making trade decisions effectively. Also, it enables you to maintain a powerful trading strategy and adjust it accordingly.
Self Improvement: Trading requires continuous learning and updating yourself. Many traders seek relationship managers or expert advice to improve their trading styles.
However, a trading journal is a way of self-evaluation and improvement. You can identify what you need to change and continue using these diaries.
Maintaining Consistency: Profit-making is not difficult in forex. However, consistently remaining in a stable position is quite challenging. A trading journal is a great way to stand out from the crowd and stay consistently profitable.
Profit and loss are part of trading. However, consistency is when you manage to keep your profits more than the losses. These records will help you to maintain your risk-to-reward ratio and eliminate the chances of significant losses.
Historical Record: Another benefit of a trading journal is you will have a record of all your trading transactions. It enables you to analyze your overall performance.
So when you feel like quitting or putting a significant amount in the forex market, you can determine whether it will benefit you. In addition to these, you can show these records to any experts to get improvement suggestions.
Disciplined trading: Discipline is the key to success while trading forex. Many traders may find discipline or patience in trading overrated. However, that is the biggest trading myth.
A trader should understand proper planning and effective decision-making are only possible when you imply discipline. You are putting your hard-earned money in the market, and recording your trade is a sign that you are taking your trading career seriously.
A trading journal is a must to keep to make a step ahead toward a successful journey. The best trading journal will assist you throughout the trade in making the right decision, minimizing your losses, optimizing strategies and risk management.
However, maintaining the trading journal is not enough. One should ensure proper and effective recording of trade details; otherwise, it will affect the whole result.
So a trader should avoid maintaining complex journals and keep the information short and precise. It may take some time, but it results in extraordinary benefits once you learn to maintain this ledger effectively.